Sergey Kurginyan: The meaning of the game - a report on the WTO
Conditions and risks of Russia joining
World Trade Organization (WTO)
Analytical report - key facts and figures
Analytical report prepared
International Community Foundation
"Experimental Creative Center" (Kurginyan Center)
1. Basic WTO rules
1.1. The WTO rules do not take into account international UN norms, etc., and have priority over national legal regulations (including on labor protection, minimum wages, social norms, environmental standards, etc.). Accession to the WTO implies that in case of conflict of norms, the rules of the WTO will be applied.
1.1.1. The WTO rules (agreement on trade and services GATS) provides for a “need test” for national laws. National laws cannot "restrict trade more than necessary." He interprets the concept of “necessity” by the WTO Court or the GATS Dispute Resolution Commission. Meetings of the court and the Commission are not public, and interested parties may sit as judges or experts. That is, the GATS Dispute Resolution Commission has a de facto veto on the decisions of parliament or government of any country in terms of trade regulation.
1.1.2. If the state has entered into an agreement to facilitate trade with one country, then this agreement should also apply to investors from other WTO member countries.
1.1.3. WTO law is a case-law (judicial decisions are based on decisions already taken). So, the more decisions have already been made against the stringent requirements of the environment and food safety, or stringent environmental standards, the more similar decisions will be made later.
1.1.4. The decisions of the Court are approved automatically, unless a unanimous opinion is expressed about the refusal of its approval. That is, a party that wants to block a decision must convince all WTO member states (including representatives of the opposing party) to refuse to approve it.
1.1.5. In the event that a party to the WTO accuses another of applying discriminatory norms, then the accused should prove his rightness, not the accuser. For example, if Russia restricts imports of American meat that has been treated with chlorine or contains antibiotics, and the United States protests in the WTO, then Russia must prove that this meat is harmful.
1.1.6. It is possible to refuse obligations to the WTO to liberalize trade or change the terms of obligations only three years after the entry into force of these obligations, and only after the payment of compensation for current and future losses to trading partners. The amount of compensation is determined by the WTO Court or the appointed Dispute Settlement Body, which is specialized in specific agreements.
If no compensation agreement is reached, or the respondent country fails to comply with the recommendations on compensation, the WTO may allow the prosecuting country to suspend its concessions and obligations towards the respondent country.
1.1.7. At present, there are publications in the world press claiming that the maximum sanction of “symmetrical refusal of concessions” to the respondent country is insufficient, and that the rules of forcible withdrawal of WTO-approved compensations in favor of the prosecutor’s country in the form of alienation of foreign financial or other assets of the respondent country. However, this idea is not yet supported by the WTO.
Some experts do not rule out that laws that are being prepared in a number of countries along the lines of the “Magnitsky law” in the United States (and with an unlimited and secret list of states and persons against whom sanctions are being imposed) may become an instrument of pressure on decision-makers in the field of compensation payments on charges in violations of the regime of the WTO.
1.2. The legal framework for the WTO includes the following basic agreements:
GATT (GATT, General Agreement on Tariffs and Trade);
GATS (GATS, General Agreement on Trade and Services);
TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights);
TRIMS (Investment Agreement);
AoA (Agreement on Agriculture);
SPS (Agreement on Sanitary and Phytosanitary Measures);
TVT (Agreement on Technical Barriers to Trade);
grant agreements;
anti-dumping measures;
agreements on the financial market.
2. Russia's main obligations when joining the WTO
2.1. GATT (Agreement on Tariffs and Trade) requires WTO members to consistently reduce trade duties and tariffs to the minimum, as well as refrain from supporting exports “beyond what is needed”.
As part of its accession to the WTO, Russia agreed to limit import duties on more than 700 commodity items. At the end of the transition period, the Russian Federation made a commitment to reduce the weighted average import tariff rate on goods to 7,8% from 10% in 2011.
The average agricultural tariff will be reduced to 10,8% from the current 13,2%, the weighted average import duty on manufactured goods will be from 9,5% to 7,3%. More than a third of import tariffs will be reduced from the moment of accession, another quarter - three years later.
At the same time, in Russia the total state support of exports does not exceed $ 600 million per year. In the world, government support only for export insurance in 2011 amounted to (in billions of dollars): China - 60; France - 30; United States - 17; India - 15; Germany - 13; Italy - 10; Brazil - 10; Japan - 5; Canada - 5; United Kingdom - 3.
2.2. GATS (trade and services agreement) requires the following sectors to be open to foreign capital:
Business services: doctors, veterinarians, lawyers, tax consultants, architects, engineers, lawyers, computer services, databases, research and development, real estate services, repair and cleaning of premises, leasing of transport, ships, production equipment, advertising, repair, printing houses, economic advice and more.
Communication services: mail, courier delivery, telephone, email, data transmission, telex, television, radio, film, video, music and more.
Construction and installation: all types of construction.
Trade: wholesale and retail, franchise and more.
Education: kindergartens, school education, higher and vocational education, additional education and more.
Services in the field of ecology: water supply and sewage, garbage, sanitation, etc.
Financial services: all types of insurance (life, accident, medical, etc.), banking and financial services, including derivatives, etc.
Medical and social services: hospitals, other health services and social services,
Tourism: hotels and restaurants, travel agencies, guides, etc.
Recreation, culture and sport: theaters, circuses, leisure sector, news agencies, libraries, archives, museums, other cultural services and more.
Transport services: sea and river shipping, air transportation, space flights, railways, road system, oil pipes and more.
Energy: mining and transportation of minerals. So far, negotiations are held mainly on a bilateral basis, but the opening of this sector is planned to be imposed on all countries in the near future. (http: //www.wto.org/english/tratop_e/serv_e/energy _...)
Other services not listed.
When joining the WTO, Russia will assume obligations for the 116 types of services from 155, stipulated by the WTO classification. That is, Russia in the field of GATS regulation has managed to stipulate a minimum of special conditions. In addition, according to the rules of the WTO, its members are obliged to gradually remove all restrictions that they initially established for foreign individuals and companies in the lists of their obligations.
2.3. TRIPS (Agreement on the Protection of Intellectual Property Rights in the Field of Trade) requires payments for the use by a member country of patents of other countries. Russia did not stipulate any special conditions in this part of the agreement (unlike China, India, Brazil, South Africa, etc.).
97% of world patents belong to highly developed countries. Including, patents for all developments and know-how made in the USSR / Russia and exported from the country over the past 20 years, either in the order of conducting research for foreign grants, or in the form of a “brain drain”. As a result of the supply of equipment and technologies to Russia for the purpose of the planned technological re-equipment of the economy, they will necessarily have a “patent” premium to the price.
Of the immediate consequences in this area, experts predict the inevitable rise in price of medicines in Russia. The reason is that WTO rules do not allow the purchase and use of generics (cheap analogues of patented drugs).
2.4. TRIMS (investment agreement) prohibits the promotion of special investment conditions for foreign investors. In particular, Russia will not be able to require foreign corporations to use products, raw materials and materials produced in the country, to hire the population of the country as part of the workers, and also to put forward technology transfer requirements as an investment condition.
In this part of the WTO agreements, Russia (unlike China, India, Brazil, South Africa) also did not stipulate any significant special conditions.
2.5. AoA (agreement on agriculture) prohibits WTO member countries to provide any state support for the production and export of agricultural products in excess of those agreed during accession negotiations.
Starting negotiations on accession to the WTO, Russia determined the level of agricultural support in 89 billion dollars (the average annual level of subsidies in 1989-1991). Then our delegation consistently “handed over” initial positions, first up to 36 billion dollars, later - up to 16 billion dollars. As a result of negotiations at the time of Russia’s accession to the WTO, the level of permissible subsidies was determined in 9 billion dollars, and by 2017. should be reduced to 4,4 billion. In 2011, according to official data, we have allocated from the budget 125 billion rubles (slightly more than $ 4 billion) from the budget.
At the same time, according to the Organization for Economic Cooperation and Development (OECD), government subsidies to US agriculture increased from 100 billion to 2007 to 120 billion to 2009, in Japan from 55 billion to 57 billion, and in the countries of the European Union (27 states) decreased slightly - from 160 billion to 140 billion dollars (OECD. Stat, http://stats.oecd.org.).
As a result, on 1 a hectare of arable land in Russia is allocated in 40 times less funds than in the European Union, and in 15-17 times less than in the USA. Experts recognize that Russian agricultural competition on the open market is impossible under such conditions.
3. Russia's most painful obligations when joining the WTO and the consequences of their implementation
3.1. In the area of access to natural resources, Russia has committed itself to raising the price of natural resources for domestic production (it is agreed to temporarily regulate prices for citizens) to the level of export prices for resources. Regarding the access of foreign firms to the construction of oil and gas pipelines, dams and power plants, the WTO member countries ’claim documents are already ready, demanding to abolish domestic laws that restrict such access“ beyond what is necessary ”.
Further, Russia has committed itself to allow foreign legal entities and individuals from WTO member countries to provide services for geological and geophysical scientific research without restrictions. So, since the Law "On Subsoil" and the legislation on Production Sharing Agreements (PSA) contradict WTO rules (for example, the PSA law requires that at least 70% of equipment and services used in projects be Russian-made), these laws need to cancel.
These conditions for entering the WTO will lead to the loss of ownership of geological information about the subsurface, which will be received by foreign subsoil users; to the loss of the advantages of domestic subsoil users in the registration of the right to develop mineral deposits discovered by foreign companies; to the loss of the exclusive right of the Russian Federation to intellectual property created on the basis of geological information about the subsoil.
In other words, the leadership of Russia will not even know what exactly, in what volume and quality, there is in the national depths.
It should be noted that in the USA and China only national companies are allowed to take part in the oil and gas services, which is due to the strategic importance for the safety of the country of the results of geological exploration, seismic exploration, drilling, geophysical surveys of continental and marine wells.
3.2. In the sphere of financial services, from the agreements adopted with the WTO, the provision that federal financial authorities will not be able to apply measures that would not allow an increase in the operating capital of banks receiving foreign investment is particularly dangerous; prevented the expansion of the scale or volume of business of such banks (that is, the seizure of the market share of domestic banks); prevented the participation of banks with foreign investments in the opening of domestic branches in the Russian Federation (that is, the territorial expansion of foreign banks).
The agreed quotas for the share presence of foreign banks in the financial system of Russia will not work, since an increase in the authorized capital of foreign banks at the expense of profits earned in the Russian Federation or profits returned to the Russian Federation from abroad will be considered domestic investments. In addition, all investments made by Russian legal entities financed from abroad, into subsidiaries and domestic branches of the Russian Federation, will also be considered domestic investments.
That is, the conditions adopted by Russia for joining the WTO actually remove almost all restrictions on the actions of foreign financial structures in Russia.
3.3. According to experts of the agro-industrial complex, in the agricultural sector, pig and dairy farming will suffer the greatest losses from joining the WTO.
For 6 years of the national agrarian and industrial complex program, 200 billion rubles were invested only in pig breeding. Today, Russia's pork self-sufficiency is about 70% (expected production in 2012 year is 2,6 million tons). Under WTO terms, there will be a rapid drop in production to 2 million tons, and work will be curtailed to 60% of pig farms. Priority "candidates for bankruptcy", according to official reporting according to international standards, are such major enterprises as the agro-industrial holding Miratorg. Tens of thousands of jobs will disappear in the industry. In the livestock industry, one job creates around 10 jobs throughout the country — in logistics, processing, etc., that is, the total employment losses in the industry will amount to hundreds of thousands of people.
After the entry into force in Russia of new customs duties, imports of almost all dairy products will increase, and domestic production will decrease. The market will be filled with cheap imported dairy products with vegetable fats instead of animals. Already in the first year, the loss of agricultural producers due to a decrease in the price of milk will amount to 29 billion rubles only on the volume of marketable milk, further losses will grow. Lower prices will lead to a drop in livestock numbers and gross milk yield, massive bankruptcies of producers, as well as a sharp reduction in rural jobs.
3.4. The reduction of duties on industrial products when Russia joins the WTO will deal a very painful blow to most industries, excluding the raw materials industry of low processing.
The reason is that most of the enterprises of the Russian industry work with low profitability, many (especially in single-industry towns) are unprofitable and are held at the expense of state support (subsidies, benefits, loan repayment, debt amnesties). The reduction of fees for foreign competitors and the inaccessibility of state support for joining the WTO, according to available estimates, will lead to the ruin and bankruptcy of 30-40 thousand industrial enterprises over the next two to three years. At the same time in the area of socio-economic disaster will be more than 300 single-industry cities. Compulsory when entering the WTO, an increase in domestic prices for energy resources and raw materials for enterprises will accelerate and deepen this process.
3.5. In the sectors of the defense industry (these are about 1300 enterprises and organizations in 64 regions of Russia, with employment of about 2 million people), most enterprises are on the verge of profitability or unprofitable, especially those that produce civilian goods.
Accession to the WTO excludes current measures of direct and indirect support for these enterprises (including subsidies and debt amnesties). At the same time, with the projected reduction in budget revenues as a result of joining the WTO, the state will sharply decrease the opportunities for supporting defense enterprises with a government procurement mechanism.
Under these conditions, after Russia’s accession to the WTO, many domestic industries that provide manufacturers will quickly and finally disappear. weapons and military equipment with raw materials, semi-finished products, components and parts.
So, according to the official reporting according to national standards, after entry into the WTO, the largest defense industry enterprises such as LOMO OJSC, Ural Optical Mechanical Plant OJSC and a number of others will not be able to ensure profitability. Including some strategic enterprises that are the “framework” of the economy and social sphere of “single-industry towns” (for example, Tutaev Motor Plant OJSC).
According to experts of the defense industry, under the conditions of the WTO regime, more than 600 enterprises of the industry will not be able to survive, thousands of jobs will be lost to 700, and a part of highly qualified personnel that is critical for ensuring the work and development of the industry.
3.6. As a result of joining the WTO and reducing import duties on cars, the share of Russian manufacturers in the passenger car market will fall from 65% to 40%, in the commercial vehicle market - from 70% to 35% in the coming years, with a tendency to further decline.
The compensation decision proposed by the government for the automotive industry in the form of an indirect duty “utilization fee” cannot be durable, it will be necessarily challenged and overturned by the WTO Court.
According to the official reporting according to international standards, such largest Russian auto enterprises as the AvtoVAZ Group, the GAZ Group, and KAMAZ will be beyond the margin of profitability. This part of the agreement will have a particularly painful effect on the economic and socio-political situation in the cities, where the vast majority of the population works in the car manufacturing plants (Togliatti, Naberezhnye Chelny).
Note that in China and Brazil, the importation of used cars is completely prohibited, while in India, foreign cars are taxed in 105– 200%.
3.7. In the agricultural machinery industry, the import duty on new imported combine harvesters is reduced by 3 times, and the duty on used agricultural machinery will decrease by 5 times. At the same time, the import of foreign agricultural equipment in Russia will receive access to all permitted types of subsidies.
According to the calculations of production volumes and profitability, in the conditions of the WTO regime, such large plants as Rostselmash immediately become uncompetitive and unprofitable. Rostselmash already almost doesn’t order equipment with the expectation that cheap used foreign equipment will rush to Russia in the near future. In general, the industry predicts a decline in the share of domestic agricultural machinery in Russia from 52% in 2011 to 12% in 2015 and to 3% in comparison with 2020. About 100 enterprises will be lost, more than 50 thousands of jobs will be reduced.
3.8. When Russia joins the WTO, most of the basic domestic chemical production becomes uncompetitive. So, now the national chlorine industry satisfies the domestic Russian demand for polyvinyl chloride (PVC) by 50%, the rest is imported, but new production facilities are being built in Russia. 70% of the prime cost of PVC is electricity, which for a Russian manufacturer is 2,5-3 rubles per kWh, and in China, 30 – 40 kopecks per kWh.
When Russia joins the WTO, import duties on PVC will significantly decrease, the market will become completely open, the price of energy will rise. Russian production will automatically lose competitiveness, will be ousted from the market and bankrupt.
3.9. According to experts of the Ministry of Economic Development, the loss of the light industry as a result of joining the WTO will be at least 2,7 billion rubles a year, and compensation for losses due to state support will not exceed 600 million rubles a year. The ruin of the industry will continue.
3.10. Regarding the telecommunications services market, the conditions for Russia's accession to the WTO are among the most difficult among all service sectors (the most strategic among the strategic sectors). All the BRICS countries in this area have negotiated strict restrictions for non-residents.
When joining the WTO, the Russian Federation undertakes to admit legal and physical persons from other WTO member countries to provide telecommunication services both within the Russian Federation and abroad, but to recipients from the Russian Federation, under the conditions of a national regime without restrictions. That is, Russia gives "in common use" the most important area of national security.
Further, foreign persons will be admitted without any restrictions to the provision of information agency services to any persons from Russia through the establishment of a commercial presence in Russia, not necessarily in the legal form of a legal entity. For the purpose of providing such services, a person from a WTO member state will have the right to open, for example, a branch in Russia, or use an agent.
Of all the BRICS countries, Russia is the only one that has opened the market for information agency services for foreign individuals from WTO member countries, and on favorable conditions.
3.11. When Russia joins the WTO, Russia opens the admission of foreign persons to the services of patent attorneys. This creates opportunities for unlimited leakage of dopatent information (technological solutions and know-how) from the country. That is, it threatens the information and national security of Russia, and contradicts the Civil Code of the Russian Federation and the Federal Law "On Patent Attorneys" (since 1993, for reasons of national security, only Russian citizens can be patent attorneys in Russia).
3.12. In the sphere of wholesale and retail trade, Russia has assumed the obligations of admitting foreign companies to the Russian market under the conditions of a national regime with three restrictions:
- commercial presence is allowed only in the form of a legal entity of the Russian Federation;
- a non-discriminatory state monopoly on alcohol-containing products may be introduced;
- commitments are not made in respect of subsidies and other forms of state support in relation to trade in handicraft and other goods and objects related to the national culture and identity.
Wholesale and retail trade is the main activity of Russian small and medium businesses (it accounts for 70-75% of the turnover of all small and medium-sized companies in Russia), this is the main part of the Russian so-called "middle class". Since access to credit for Russian trading companies is extremely limited, experts predict widespread expansion of foreign trading networks into our market when they join the WTO. At the same time, trade will be largely cut off from domestic producers, since foreign trade networks are usually tied to foreign suppliers of goods, and, accordingly, will create barriers to the admission of Russian goods to our domestic market.
As a result, falling incomes and the loss of a significant market share by domestic trading companies can cause a sharp increase in unemployment both in trade itself and in Russian industries supplying goods (according to various estimates, from 200 to 600 thousand jobs), the loss of a crucial part of the Russian so-called "Middle class", and the corresponding severe economic and socio-political consequences.
3.13. In the field of equipment repair and maintenance, Russia has assumed obligations to allow foreign legal or natural persons from WTO members to provide services both within Russia and abroad, but to recipients from Russia. The obligations of Russia extend to services for the repair of personal items and household goods (equipment for non-commercial use), as well as railway and road equipment and transport, fishing and aircraft of commercial use.
In this industry, after trading, most small and medium-sized businesses are concentrated. Its crowding out by large foreign companies with their service and repair centers will sharply increase unemployment and also lead to the ruin of a substantial part of the “middle class” that is being formed in the country.
In addition, Russia, not being able to compete with foreign firms in the repair and maintenance of imported equipment, which under the terms of the WTO will enter our domestic market, will quickly lose in this industry the existing qualified human resources.
3.14. In the field of road passenger and freight services (hereinafter PGPA) and maintenance, repair of equipment and support services for road transport (TRVU), Russia has assumed the obligation to allow foreign persons and companies to enter the Russian Federation with the provision of a national regime with two restrictions:
- commercial presence of foreign companies is allowed only in the form of a legal entity of the Russian Federation;
- vehicles engaged in transportation must be registered in the territory of the Russian Federation.
The main risks of admitting non-residents to this service sector are a sharp increase in the load on the road network through cross-border transportation. According to the Ministry of Transport of the Russian Federation, only 37% of federal and 24% of regional roads meet the load standards. The increase in road loading will lead to an increase in transportation costs. Many domestic carriers, due to limited access to credit and a worse state of the fleet than foreign competitors, consider themselves unable to compete with foreign carriers. Only 1 / 4 of Russian transport companies consider themselves ready to compete in the domestic market, 18% to competition in the CIS markets - 9% in foreign countries, and 10% of transport companies that are ready for membership in the WTO. Most domestic companies consider their absorption by foreign competitors inevitable.
3.15. In the field of construction and related engineering services, Russia has undertaken to provide foreign companies with a national regime of activity on its territory with the only restriction:
- commitments are not made with regard to subsidies and other forms of state support in terms of national identity objects and / or buildings and cultural heritage sites indicated in official registers.
The result will be a reduction in customs duties and technological restrictions on the import of imported building materials, the expansion of foreign investment and development companies in Russia, as well as the expansion of the volume of operations of foreign financial institutions in the domestic real estate market.
By virtue of access to cheap “long” loans, foreign developers are ready to work with much lower rates of return than domestic ones. In addition, foreign companies have the opportunity to import cheaper (including subsidized and low-quality) building materials and equipment, as well as attract relatively cheap and qualified foreign personnel to projects in Russia.
In this regard, experts consider it highly probable that foreign developers absorb a significant part of Russian construction and related companies. Thus, according to the calculations of the Union of Ural builders, all sectors of the region's construction industry, except for the production of refractory materials, ceramic tiles and cement, cannot withstand competition under the accepted conditions of Russia’s accession to the WTO.
3.16. When Russia joins the WTO without restrictions, it opens up the admission of foreign persons to provide consulting and related services in the management of any person from Russia. For the purpose of providing such services, a person from a WTO member state will have the right to open, for example, a branch in Russia, or use an agent. That is, foreign consultants will demand their presence “on equal terms” with Russian in the sphere of management and management in both the private and state segments of the national economy.
3.17. After joining the WTO, Russia will not be able to use its own phytosanitary standards to restrict / prohibit the import of harmful or dangerous products. The standards established by the WTO are much lower than Russian and do not allow a ban on the import of products containing pesticides and herbicides, genetically modified organisms, hazardous plastics, etc. And they are not even allowed to label such products, considering it a violation of equal competition.
3.18. In the health sector, Russia has assumed the obligation to admit foreign companies and individuals to provide commercial medical and dental services without restrictions, and hospital (hospital) services with the right of Russia to restrict the establishment of commercial hospitals in Russian territory by non-residents. The organization of the provision of such services requires permission from the Russian side, but it must be issued "on a non-discriminatory basis."
At the same time, according to the GATS rules, foreign private medical institutions should receive “equal conditions of competition” with Russian public sector medical institutions (including subsidies, if any). That is, Russian medical institutions will face growing “equal” competition with foreign ones in conditions when companies in competing countries have unconditional preferences in terms of government spending on medicine and technological equipment.
In addition, in terms of further negotiations, the question of admitting foreign companies to the privatization of state medical institutions in Russia has already been raised. As a result, experts predict a rapid further degradation of the scope of free medical services and a sharp increase in the cost of paid medical services, which is “very heavy” in terms of real disposable incomes of 85-90% of households. That is, the complete “cut-off” of the overwhelming majority of the country's population from quality healthcare.
3.19. In the field of education, Russia gives foreign organizations in the field of primary, secondary and higher education the right to operate on Russian territory under the Russian “national regime” (including cross-border “distance education”) with only two significant limitations:
- commercial presence of foreign educational institutions on the territory of Russia is possible only through established Russian legal entities that are non-profit organizations;
- Russia does not accept obligations for foreign companies in the field of education regarding equal access to subsidies and other forms of state support with Russian educational institutions.
Since the sphere of education, especially primary and secondary, is the basis for the formation of culture and worldview of citizens, the agreement with the WTO, thus, gives foreign companies extremely high possibilities to influence the cultural and ideological positions of the Russian young generation.
4. Expert estimates of the overall losses of the Russian economy from accession to the WTO and the prospects for the development of the socio-economic situation in the country.
4.1. Economists estimate Russia's budget losses from joining the WTO at the first stage in 250-300 billion rubles. per year (more than 2% of budget revenues in 2012) and consider that further losses will increase.
Even according to the most optimistic and conservative estimates, as a result of Russia's accession to the WTO, a reduction in employment in the country by 2020 will amount to 2,2 million people. GDP growth rates to 2020 will lose 2,5% per year. Direct budget losses from the reduction of import duties will amount to the same term 300 billion rubles per year. A consolidated budget of the Russian Federation (as a result of all losses) will lose 500 billion rubles a year.
The heaviest losses are waiting for the food industry and agriculture. In these industries, the loss of 1,6 million jobs is expected, the food industry will lose 40% of production, agriculture - 26% of production.
Experts call engineering industry next in terms of losses: at least 300 thousands of jobs will be lost, and heavy engineering and agro engineering will disappear almost completely, with dominoes losing jobs in related industries.
In general, the forecast accumulated losses of the GDP of the Russian Federation to 2020 will amount to 3,5%, the losses of industrial production - 20%, and the decline in the manufacturing industry - more than 30%.
4.2. Entry into the WTO will immediately devalue and deprive all the strategies developed by the Government for the development of industries (“Development Strategy for Heavy Machinery to 2020”, “Development Strategy for Light Industry in the Russian Federation to 2020”, development program for flax industry to 2020, etc.). Since all these strategies provided for the transition period, state support (prohibited or restricted by the WTO) and measures to protect the domestic market (also prohibited by WTO rules).
4.3. The government's measures of compensation and protection for industries within the framework of accession to the WTO (preferences for government orders, anti-dumping investigations, etc.) cannot be long-term and effective, as they will be closely monitored and immediately challenged in the WTO. Where Russia has one (and very weak) voice from one hundred and fifty. The practice of the WTO shows that the decisions of the WTO Court and the Dispute Resolution Commission, with rare exceptions, are made in favor of claims of developed countries.
4.4. UN and OECD studies show that only those countries that have spent most of the modernization of their economies (including import substitution and the creation of competitive high redistribution industries) before joining the WTO receive benefits.
From the report of the United Nations Organization for Trade and Development: "The promised benefits for developing countries from the Uruguay Round of WTO negotiations were exaggerated ... Instead, poverty and income differences within and between countries increase again, and employment falls in developing countries." (UNCTAD (1999): Trade and development report. New York / Geneva)
4.5. From the point of view of risks to the Russian economy when entering the WTO, the greatest threat, in the opinion of most experts, is expansion into the Russian markets of industrial and financial corporations of the PRC. The reasons are the high competitiveness of Chinese products and services (due to the undervalued yuan and low labor costs compared with Russia), as well as the almost unlimited (and specified when the PRC joins the WTO) state export support. This, with a reduction in duties and the abolition of other protective measures by Russia, virtually deprives Russian producers of the opportunity to effectively fight to maintain their share in the domestic market.
4.6. Domestic analysts associate with the upcoming entry of Russia into the WTO, a substantial reduction in the volume of lending to enterprises of potentially problematic industries by domestic and foreign banks (due to fears of non-return of loans).
A number of foreign analysts believe that the massive net outflow of capital from Russia noted in 2012, the reduction in foreign direct investment and the decline in the participation of foreign investment funds in Russian exchange assets are also directly related to the prospect of Russia joining the WTO. Which is supposed to be followed by massive bankruptcies of enterprises, a sharp increase in unemployment, a fall in household incomes in the lower and middle strata of the population, and massive social protests.
If the costs of joining the WTO are multiplied with the deterioration of the conjuncture in the global energy markets (which is estimated as highly probable during the beginning second wave of the global crisis), then, according to experts, the accumulated Russian currency “airbag” will be spent during the year, and the negative economic and social processes may become uncontrollable "explosive" nature.
4.7. The World Bank report on Russia, released in April of 2012, predicts that Russia's accession to the WTO will provide Russia with additional GDP growth in the coming years by 3,3%, and in 10 years - up to 11% per year. However, the WB claims that 72% of this increase will be a consequence of the development of the services sector as a result of the entry of foreign companies into the Russian domestic market, and above all - financial companies. And 18% GDP growth, according to the WB forecast, will provide a reduction in import duties, thanks to which Russia will be able to buy foreign goods, equipment, components and materials at lower prices. And only 10% of GDP growth Russia has a chance to get by improving the conditions of export of steel, non-ferrous metals and chemicals.
That is, when analyzing the conditions for Russia's accession to the WTO, the World Bank recognizes that the main (and supposedly positive) result of this act will be the massive expansion of foreign corporations to all Russian domestic markets. No expansion of the possibilities of admitting Russia to foreign markets, as well as the possibility of correcting the “commodity bias” in the production sectors of the national economy, is not expected. In particular, the WTO member countries have not undertaken any obligations to reduce tariff and non-tariff barriers to the export of products of the Russian manufacturing industry.
4.8. It should be noted that the listed WB measures of liberalizing the admission of foreign corporations to our domestic market, which allegedly ensured GDP growth, Russia could take in order of its own legislative decisions without joining the WTO. And without taking on irrevocable obligations, depriving the government of almost all the possibilities of independent realization of structural, industrial, social and other policies.
5. Prospects for further negative for Russia transformation of WTO rules
5.1. The WTO is preparing a new contractual package relating to export duties on energy and raw materials, and requiring the abolition of these duties. The package is expected to be tabled during the next summit of the Doha Round of WTO negotiations.
In the event of cancellation of duties on oil and gas exports, the direct losses of the Russian budget will amount to more than $ 110 billion dollars a year.
5.2. The WTO is preparing a package of documents, which provides for a sharp restriction of the sovereign rights of states to regulate investment processes in their territories. According to the drafts of these documents, foreign corporations should be entitled to challenge in court the national laws that reduce the profits of TNCs from production and investment activities in the respective countries. And also - to demand compensation for the damage suffered and lost profits. Moreover, the general arbiter in such disputes will not be the national judicial authorities, but the WTO Court.
5.3. The WTO is preparing a package of documents prohibiting member countries to regulate the volume (quota) of deliveries of goods, including commodities, to the world market, which is considered market manipulation. For the first time, the thesis on the need to ban such regulation, WTO Director General Pascal Lamy, was voiced in 2010.
At the same time, the WTO is already undergoing a lawsuit in a lawsuit filed by the United States, the European Union and Japan against the People's Republic of China on the issue of China’s quota mining and supply of rare earth metals to the world market. If the PRC loses this process, a precedent will be created, and then the corresponding non-regulation requirements for export volumes will be included in the total package of countries' obligations to the WTO.
5.4. Further, the WTO is preparing a package of documents prohibiting national financial regulators to provide preferences to their producers at the expense of the national currency exchange rate being undervalued compared to the purchasing power parity (PPP). Attempts by the US and the EU to accuse the PRC leadership of such a “manipulation of the course” (the EU and the US are too dependent on trade with China) and therefore unsuccessful.
For this reason, it is highly likely that a precedent (for the WTO legal system, precedent is of key importance) will be attempted to be created on the basis of the charge against Russia, which also has a ruble exchange rate that is undervalued compared to the PPP.
If such an accusation takes place and will be successful, Russia will lose the last tool at least partially maintaining the competitiveness of most sectors of the national economy, both domestically and globally.
5.5. Finally, according to foreign sources and the recognition of the head of the Ministry of Economic Development, Andrei Belousov, a number of countries have already prepared lawsuits against Russia in the WTO Court to challenge national legal norms, which they consider “restricting trade more than necessary”. The practice of such lawsuits again shows that they are most often catered for in favor of developed countries capable of "pushing" the necessary decision in the WTO.
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The results of voting in the Duma on the WTO
Total:
FOR - 238 people.
AGAINST - 209 people.
ABSTAINED - 1 pax
VOTED - 448 pax
NOT VOTED - 1
Result - accepted
Faction "United Russia"
BEHIND - 235 people.
AGAINST - 0 people.
ABSTAINED - 1 pax
VOTED - 236 pax
NOT VOTED - 1 pax
Total members - 237 people.
Faction of the Political Party "Communist Party of the Russian Federation"
FOR - 0 people.
AGAINST - 92 people.
ABSTAINED - 0 pax
VOTED - 92 pax
NOT VOTED - 0 pax
Total members - 92 people.
Faction of the Political Party "Liberal Democratic Party of Russia"
FOR - 0 people.
AGAINST - 56 people.
ABSTAINED - 0 pax
VOTED - 56 pax
NOT VOTED - 0 pax
Total members - 56 people.
Faction of the Political Party "Fair Russia"
BEHIND - 3 people.
AGAINST - 61 people.
ABSTAINED - 0 pax
VOTED - 64 pax
NOT VOTED - 0 pax
Total members - 64 people.
Voted for:
Zotov Igor Lvovich
Lakutin Nikolay Afanasyevich
Mitrofanov Alexey Valentinovich
Total:
FOR - 238 people.
AGAINST - 209 people.
ABSTAINED - 1 pax
VOTED - 448 pax
NOT VOTED - 1
Result - accepted
Faction "United Russia"
BEHIND - 235 people.
AGAINST - 0 people.
ABSTAINED - 1 pax
VOTED - 236 pax
NOT VOTED - 1 pax
Total members - 237 people.
Faction of the Political Party "Communist Party of the Russian Federation"
FOR - 0 people.
AGAINST - 92 people.
ABSTAINED - 0 pax
VOTED - 92 pax
NOT VOTED - 0 pax
Total members - 92 people.
Faction of the Political Party "Liberal Democratic Party of Russia"
FOR - 0 people.
AGAINST - 56 people.
ABSTAINED - 0 pax
VOTED - 56 pax
NOT VOTED - 0 pax
Total members - 56 people.
Faction of the Political Party "Fair Russia"
BEHIND - 3 people.
AGAINST - 61 people.
ABSTAINED - 0 pax
VOTED - 64 pax
NOT VOTED - 0 pax
Total members - 64 people.
Voted for:
Zotov Igor Lvovich
Lakutin Nikolay Afanasyevich
Mitrofanov Alexey Valentinovich
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